PG&E Corporation and Pacific Gas and Electric Company have submitted regulatory and court filings outlining the key elements of the company’s updated Chapter 11 Plan of Reorganisation.
The testimony has been filed with the California Public Utilities Commission . The utility claims that it remains on track to have its Chapter 11 Plan confirmed by 30 June 2020, the deadline for participating in the state’s new go-forward wildfire fund.
Upon emergence from Chapter 11, PG&E says it will be a financially stable company able to continue prioritising safe operations and customer focus while meeting California’s energy needs and clean energy goals in a changing climate.
PG&E believes its plan meets both the letter and spirit of Assembly Bill (AB) 1054, including being rate neutral on average to customers, whilst addressing concerns the state’s governor raised in his December 13, 2019, public letter to the company.
Key updated safety, governance, and operational elements of the Plan include:
- Refreshing the Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company to ensure the necessary expertise and skills to oversee the company post-emergence;
- Implementing a plan to regionalise the company’s operations and its infrastructure to enhance the company’s focus on local communities and customers;
- Further strengthening PG&E’s corporate governance by appointing an independent safety advisor after the term of the court-appointed Federal Monitor expires;
- Establishing a newly expanded role of Chief Risk Officer who will report directly to the PG&E Corporation CEO and have oversight of risks associated with PG&E’s operations;
- Establishing a newly expanded role of Chief Safety Officer who will report directly to the PG&E Corporation CEO and have oversight of PG&E’s strategy to further improve public and workforce safety;
- Forming an Independent Safety Oversight Committee (ISOC) with non-PG&E employees to provide independent review of the company’s operations, including safety and regulatory compliance, safety leadership, and operational performance;
- Committing to enhanced safety metrics and stricter regulatory oversight with escalating enforcement mechanisms;
- Reforming executive compensation to further tie it to safety performance; and,
- Assuming all pension obligations, other employee obligations, and collective bargaining agreements with labour unions, and all power purchase agreements and community choice aggregation servicing agreements.
Key updated financial elements of the Plan include:
- Paying value in excess of $25 billion to wildfire victims through the settlements reached with individual victims, subrogation claimants, and public entities; and
- Emerging with a financing structure that protects customer rates and positions the company for long term success. This includes saving PG&E’s customers nearly $1 billion through the previously announced settlement with noteholders and contributing shareholder credits of approximately $8 billion so that the plan is neutral on average to customers.
“Under our Plan, the company will emerge from Chapter 11 as a reimagined utility with an enhanced safety structure, improved operations, and a board and management team focused on providing the safe, reliable, and clean energy our customers expect and deserve. Our 23,000 PG&E employees are striving every day to deliver that service and to build the utility of the future. We are committed to emerge from Chapter 11 by June 30, 2020, in a manner that allows us to help lead California toward the future, meeting the highest safety, governance, and operational standards,” said CEO and President of PG&E Corporation Bill Johnson.